Standard deviation of the damage, Econometrics

Assignment Help:

In a year, weather can impose storm damage to a home. From year to year the damage is random. Let Y be the dollar value of damage in a given year. Assume that 95% of the year's Y=$1,000, and 5% of the years, Y=$15,000.

a. Calculate the mean and standard deviation of the damage in any year.

b. Consider an 'insurance pool' of 100 sufficiently dispersed homes, which implies the damage to dissimilar homes can be viewed as separately distributed as random variables. If ? is the average damage to those 100 homes in a year, (i) what is the expected value of the average damage? (ii) What is the probability that ? exceeds $2000?

 


Related Discussions:- Standard deviation of the damage

Correlation and rank correlation, Explain the difference among the usual (p...

Explain the difference among the usual (product moment) correlation and rank correlation. In what situations is it more appropriate to use rank correlation?

Maximizing profit, verify Leibniz rule for differentiation under the integr...

verify Leibniz rule for differentiation under the integral sign for the following function 2x^2+3xy+3y^2

Quizzes., Hello, I have an online economics quizzes. three quizzes each qui...

Hello, I have an online economics quizzes. three quizzes each quiz 50 questions for 1.5 hour. its on R. Glenn Hubbard and Anothony Patrick O''Brien- Microeconomics, 4th Ed.I did th

Household and the environment , Choose Y and X variables to model on the Ho...

Choose Y and X variables to model on the Household and the Environment Survey 2006. Using Ox software to write a program to do estimation, and then write a report based on the an

Project, i need help in project

i need help in project

GDP, If in some country personal consumption expenditures in a specific yea...

If in some country personal consumption expenditures in a specific year are $50 billion, purchases of stocks and bonds are $30 billion, net exports are -$10 billion, government pur

Rihgt now.., In June, Leslie wins a cash prize of $2,000. She plans to use ...

In June, Leslie wins a cash prize of $2,000. She plans to use this money to pay her tuition bill in September. Leslie puts this money in a savings a savings account because her mai

What is the npv of the project, You are considering a new line of consumer ...

You are considering a new line of consumer products. You expect revenues of $14 million in each of the next ten years, while expenses are half of revenues (all cash flows are assum

Transportation problems, Process of least cost method and how to do a minim...

Process of least cost method and how to do a minimisation problem

Coursework, Following the general methodology used by econometricians as ex...

Following the general methodology used by econometricians as explained in the session for week 1 (eight steps), explain how you would proceed to determine if a good complies with t

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd